FB News: Farmers, employers face capital gains tax hike
Apr 10, 2012
April 2, 2012
With unacceptably high unemployment plaguing the country and the U.S. now faced with the highest corporate tax rate in the world, the White House and Washington should be working toward a simple goal: making America the most dynamic and competitive place in the world for job creation.
A critical first step—supported by a broad coalition across American industries and sectors—would be to remove uncertainty and make permanent the 15 percent tax rate on capital gains.
Faced with the threat of a dramatic tax increase in 2013, American employers of all sizes and sectors are hamstrung by uncertainty when making consequential investment and growth decisions.
When it comes to America’s farming communities, the stakes are high. Farmers would be hurt tremendously by a capital gains tax increase because they are constantly investing in assets—like land, buildings and animals—to generate revenue and upgrade their operations, looking ahead to the future.
Production agriculture requires large investments in assets, and capital gains taxes apply when these assets are transferred to a new or expanding farm or ranch. This means any increase in capital gains taxes would make it much more difficult for farmers and ranchers to purchase or shed assets to adapt to the market. A staggering 40 percent of all agricultural producers report some capital gains, twice as many as the average American taxpayer.
American farms—98 percent of which are family owned or run—would simply be devastated by a crushing new tax increase that disproportionately affects them.
The threat alone of large tax hikes on capital gains next year is damaging enough on farms, employers and families. But couple that with the new 3.8 percent tax from the health care law and the potential sun-setting of the lower income tax rates of the last decade, and the American taxpayer is facing a 58 percent higher tax rate on capital gains income.
That would be devastating and have a far-reaching economic impact. As President Obama rightly insisted in August 2009, “you don’t raise taxes in a recession.” You don’t raise taxes on the families, farmers and small businesses that are simply trying to stay above water either.
Whether seen on a family farm, in a small business or in a board room, America is in a global epic struggle for jobs and capital. Certainty and competitiveness are foundations for success.
It’s why I recently introduced the Tax Hike Prevention & Business Certainty Act (H.R. 3091), in order to keep capital gains and dividend tax rates at their current 15 percent and ensure farms and businesses have the certainty needed to succeed. My bill and its Senate companion (S. 1647) have support from a broad coalition of 27 American businesses and organizations, including the American Farm Bureau.
America’s job creators, already saddled by a complex and disincentivizing tax system, can illafford additional barriers to job creation, particularly as America’s competitors become increasingly attractive as the world around us is lowering tax rates.